Houston, TX Solar Panels
Solar Power in Houston
Houston homeowners face a common challenge: electricity bills that keep climbing year after year. With Texas electricity prices increasing 28% from 2020 to 2024, many are discovering that solar panels for home use offer a practical way to offset rising energy costs while taking advantage of the city’s abundant sunshine.
This guide walks you through the essentials of solar installation in Houston—from understanding costs and potential savings to navigating permits and local incentives that can make your transition to clean energy more affordable.
How Much Do Solar Panels Cost in Houston, TX?
Our calculator uses real installation data from Houston homeowners in neighborhoods like Katy, Sugar Land, The Woodlands, and Pearland. Get accurate cost estimates based on actual local projects, not national averages or guesswork.
System
Cost
Savings
You can still access the solar tax credit through Palmetto. Talk to us today to find out how.
Key Takeaways
- Houston receives abundant sunshine year-round with 5.2 peak sun hours daily, making it an excellent location for solar energy production.
- Texas offers a property tax exemption for solar installations preventing your home’s assessed value from increasing due to solar panels.
- A typical Houston solar system can save homeowners around $76,000 over 25 years while protecting against rising electricity rates.
Houston Electricity Prices
Understanding Houston’s electricity costs is essential for homeowners looking to control their long-term energy expenses and budget more predictably.
Texas electricity rates have climbed 23% since 2021, rising from 12.1 to 14.9 cents per kilowatt-hour. For Houston homeowners, this upward trend means higher monthly bills with no signs of slowing down.
Solar panels allow Houston residents to generate their own electricity, reducing reliance on the grid and protecting against future rate increases. With abundant sunshine year-round, homes can produce significant energy independently.
Over 25 years, solar panels can shield homeowners from decades of utility rate increases. By locking in predictable energy costs today, families gain financial stability and protection from volatile electricity markets.
Price of Energy: Texas vs National Average
Houston Area Utility Providers
Understanding your local electricity rates helps you make informed decisions about energy costs. In Houston, Entergy serves as the primary utility provider, with 2023 rates averaging 13.2¢ per kWh—notably lower than both the Texas average of 14.5¢ and the national average of 16.0¢.
Houston’s competitive electricity rates stem from Texas’ deregulated energy market and the region’s proximity to natural gas infrastructure. However, even below-average rates don’t shield homeowners from price volatility, as demonstrated by the significant increases seen in recent years across the state.
While current rates may seem reasonable, locking in predictable energy costs becomes valuable when prices fluctuate. Solar panels allow Houston homeowners to generate their own electricity at a fixed cost, providing long-term stability regardless of future utility rate changes.
Houston Utilities Electricity Rates
Texas Solar Incentives
Going solar in Houston becomes more affordable when you take advantage of available solar incentives in Texas designed to reduce your upfront investment.
Texas offers a property tax exemption that prevents your home’s assessed value from increasing due to solar installation. Additionally, many Houston-area utilities provide net metering programs, allowing you to receive credits for excess energy your system generates.
These incentives can change, so research current offerings carefully. Understanding what’s available now helps you make informed decisions about your solar investment timeline.
| Incentive | Type | Description | Source |
|---|---|---|---|
| Property Tax Exemption | State tax exemption | No property tax increase from solar installations. Example: $20k system saves ~$400/year at 2% tax rate. | Learn More |
Texas offers a property tax exemption for solar and wind-powered energy devices installed on your property. This exemption prevents your local appraisal district from adding the value of your solar energy system to your property’s assessed value for tax purposes. Without this exemption, installing solar panels could increase your property taxes since they add value to your home. With the exemption in place, you won’t pay additional property taxes on the increased value that your solar installation brings to your property.
To qualify for this exemption, you must own the solar or wind-powered energy device and it must be installed on property you own in Texas. You’ll need to file Form 50-123 (Exemption Application for Solar or Wind-Powered Energy Devices) with your county appraisal district. The general deadline for filing exemption applications is before May 1st. Once approved, this exemption continues to apply as long as the system remains on your property, helping you maximize your savings from going solar by avoiding any property tax increases related to your clean energy investment.
Texas does not have a statewide net metering policy. Instead, solar compensation varies significantly depending on your local utility or electric provider. Most Texas utilities offer either net billing (export credits) or monthly net metering, where excess solar energy you send to the grid is credited to your electric bill. The value of these credits and how they’re applied depends entirely on which utility serves your area.
In deregulated areas served by utilities like Oncor (Dallas), CenterPoint (Houston), AEP Texas, and TNMP, you’ll typically work with a Retail Energy Provider (REP) like Shell Energy, which offers export credits around 7 cents per kilowatt-hour as of April 2024. These credits reduce your current month’s bill, and any excess rolls over month-to-month but is forfeited each December without payout. Some municipal utilities and cooperatives offer true monthly net metering with 1:1 credit for exports, while others provide export credits ranging from 3 to 10 cents per kilowatt-hour. Austin Energy uses a unique “Value of Solar” model that credits all production at about 9.9 cents per kilowatt-hour separately from consumption charges.
Eligibility and program details vary by utility, so you’ll need to check with your specific electric provider about their solar interconnection requirements and application process. Many utilities charge additional monthly fees for solar customers (ranging from $4.95 to $30 per month) or have minimum monthly bills. Because Texas policies differ so dramatically by location—from generous year-round credit rollovers with Grayson Collin Electric Cooperative to no compensation at all with some Xcel Energy options—understanding your local utility’s specific program is essential before installing solar panels.
Ready to start saving with solar?
Speak with a Palmetto solar expert to find out exactly how much you can save with Texas incentives.
Get a Free QuoteHouston Solar Irradiance
Solar panel production varies throughout the year based on daylight hours, weather patterns, and sun intensity. Understanding how seasons affect your solar system helps set realistic expectations for your investment.
Houston’s sunny climate and long summer days create excellent solar potential. While humidity and occasional storms are factors, modern panels perform remarkably well year-round in Southeast Texas conditions.
Solar Production in Houston by Month
What Can Your Solar System Power?
Summer Production (July)
In July, your 10 kW system could power:
- 3.6 average homes (15 kWh/day per home)
- or Run central AC for 18 hours AND power all other appliances
- or Fully charge 5.4 Tesla Model 3 electric vehicles
Winter Production (December)
In December, your 10 kW system could power:
- 2 average homes (15 kWh/day per home)
- or Keep your home heating system running for 15 hours
- or Fully charge 3 Tesla Model 3 electric vehicles
Annual Production
Over a year, your 10 kW system could:
- Offset 10 tons of carbon dioxide emissions
- or Equal the environmental benefit of planting 175 trees
- or Save approximately $4,234 in electricity costs
Want to know exactly how much solar can power your home?
Get a personalized solar analysis based on your actual home, energy usage, and roof characteristics.
Get My Custom EstimateSolar Panel Systems in Houston
We’ve mapped every solar installation across Houston to help you explore the clean energy movement in your community. Click any hexagon to see how many neighbors in that area have made the switch to solar power.
Leasing Solar Panels
In Houston, Palmetto offers Power Purchase Agreements (PPAs) through our LightReach program. With a PPA, you pay only for the electricity your solar panels generate at a set rate per kilowatt-hour, rather than making a large upfront investment or taking on equipment maintenance responsibilities.
This approach makes solar accessible without the financial commitment of purchasing a system outright. You avoid the costs of system repairs, monitoring, and upkeep—Palmetto handles all maintenance throughout the agreement. Your monthly payment fluctuates with production, typically higher in sunny summer months and lower in winter, but averages out to predictable annual costs.
Compared to buying solar panels with cash, a PPA eliminates concerns about equipment failure, warranty claims, or inverter replacements. While cash purchases offer maximum long-term savings, PPAs provide immediate bill reduction without capital investment. Learn more about whether buying or leasing solar makes sense for your situation.
Go solar without the investment
With LightReach, there are no investment costs to recoup, loan payments to manage, or maintenance needs to take on. As soon as your panels are active, your solar savings are too!
Learn MoreFrequently Asked Questions
Yes, solar makes excellent sense in Houston. With 5.2 peak sun hours daily and abundant year-round sunshine, Houston’s climate is ideal for solar energy production. Texas electricity rates have increased 23% since 2021, making solar panels an effective way to lock in predictable energy costs.
A typical Houston solar system can save homeowners around $76,000 over 25 years while protecting against future rate increases. Texas also offers a property tax exemption for solar installations, preventing your assessed home value from increasing due to the panels.
Houston does not have traditional net metering. The city is served by CenterPoint Energy, which operates in Texas’ deregulated electricity market. Instead of net metering, Houston homeowners work with Retail Energy Providers like Shell Energy, which offers a buyback program.
Under Shell Energy’s plan, excess solar energy exported to the grid is credited at 7 cents per kilowatt-hour (as of April 2024). These credits reduce your current month’s bill, with any remaining credits stored in a “buyback bank” for future use. However, unused credits are forfeited each December without payout.
Yes, solar panels typically increase home value in Houston. Research from Zillow shows solar panels increase home value by 4.1% on average, which translates to approximately $16,400 for a median-priced Houston home.
Texas’ property tax exemption for solar installations means your assessed value won’t increase for tax purposes, allowing you to enjoy the market value boost without higher property taxes. This makes solar an attractive investment for Houston homeowners planning to sell in the future.
The cost of solar panels in Houston depends on your home size and energy needs. Based on actual Palmetto installations, a typical medium-sized home (2,000-3,000 sq ft) needs a 9.72 kW system costing approximately $27,296, or $2.81 per watt.
Smaller homes may need a 6.97 kW system around $20,256, while larger homes could require a 13.04 kW system costing $35,795. These prices reflect complete installation including equipment, permits, and labor in the Houston area.
Yes, solar is financially worth it in Houston. A typical 10 kW system costs around $27,296 and saves homeowners approximately $173 monthly on electricity bills, with total savings reaching $76,000 over 25 years.
The system pays for itself in about 11 years through electricity savings. With Texas electricity rates rising 23% since 2021, solar panels protect you from future rate increases while the property tax exemption prevents higher taxes from the added home value.
At Palmetto Solar, we’re proud to serve Houston homeowners with quality solar installations backed by our national expertise and local focus. Since 2020, we’ve completed 3,810 installations across Texas, bringing clean energy solutions to communities throughout the state.
We offer competitive financing options and work with a trusted network of local installers who understand Houston’s unique climate and building requirements. Our approach combines the reliability of a national company with personalized service for your specific needs.